ELECTRONIC FRAUD EXPLOSION

By D.E.Levine

A recent survey by Ponemon Institute and Guardian Analytics found an explosion of electronic fraud among smaller businesses during 2009.

Among the businesses surveyed, 55% experienced electronic fraud and 58% of that involved online banking.

San Francisco-based Guardian issued a statement through its CEO Terry Austin stating that there was a marked increase in the level and severity of fraud attacks on the small business community.

Both the FBI and the FDIC are among agencies that issued warnings to the small business community and companies and agencies doing business with them.

According to Terry Austin the increase in electronic fraud indicates the shift in focus of hackers to small business accounts and away from consumer accounts. Hackers are also becoming increasingly more sophisticated.

Guardian, which provides fraud detection software to banks, found that cyber criminals generally introduce viruses into business computer systems in order to harvest banking passwords which they then use to transfer funds.

Hackers are using sophisticated spear phishing email attacks to introduce viruses into companies. Additionally, when employees click on infected Web sites, company computers can also be infected.

According to the survey, companies were unable to recoup stolen funds in 87% of the fraud cases.

In 57% of the cases companies were not fully compensated for their losses and in 26% of the cases were not compensated for any of their losses.

Necessary steps that need to be taken is maintaining up-to-date virus checking and elimination software, education of finance staffers about bank policies on reimbursement and the extent of the threats, and regular monitoring of accounts for missing funds.